October 9, 2012

Chinese company Huawei responded yesterday to the House Intelligence Committee´s report which claimed any telecommunications equipment from the firm could be used by the Chinese government to spy on Americans. This report caused many to worry about what, if any, ties Huawei had with the Chinese government.

Another company, ZTE, was also pointed out in the report with the same allegations. One day after the report was released, Cisco Systems heeded the words of the United States government and ended their 7-year relationship with ZTE. Though they did not call ZTE out by name, Cisco CEO John Chambers explained in an interview with the Guardian that his company does not tolerate companies who deal with Iran. In the House report, ZTE was found to break US sanctions with Iran by selling Cisco-branded gear to the Middle-Eastern company.

In a response to the backlash from the report, Huawei has struck back at the House Committee, saying that the report took nearly a year to complete and yet, it still contained false information about the Chinese Telecom dealer.

“We had hoped to ensure that the investigation would be fact-based and objective in its review of our business activities and the global issue of cyber-security,” reads Huawei´s statement about the House Committee report.

“Over the past 11 months, Huawei has cooperated with the Committee in an open and transparent manner, and engaged in good faith interaction: our top management team carried out multiple rounds of face-to-face communication with the Committee members in Washington D.C., Hong Kong, and Shenzhen; we opened our R&D area, training center, and manufacturing center to the Committee and offered a wealth of documentation, including the list of members of the Board of Directors and the Supervisory Board over the past 10 years, and the annual sales data since our establishment in 1987; we also made the list of our shareholding employees, the shares they hold, as well as information about our funding resources and financial operations available to the Committee.”

According to Huawei´s statement, the US government had already decided what the outcome of the report would be before going through the investigative process with Huawei.

The company also claims the report only serves to start rumors to “prove nonexistent speculations.”

“This report does not address the challenges faced by the ICT industry,” reads the statement.

“Almost every ICT firm is conducting R&D, software coding and production activities globally; they share the same supply chain, and the challenges on network security is beyond a company or a country. The Committee's report completely ignored this fact. We have to suspect that the only purpose of such a report is to impede competition and obstruct Chinese ICT companies from entering the US market.”

Both Huawei and ZTE have been slowly making a push into the American market, with American sales accounting for 4% of Huawei´s earnings last year, according to Reuters.

The House Committee was moved to begin investigating for this report when stories arose about ZTE selling Cisco equipment to an Iranian telecom company.

According to a Texas-based ZTE subsidiary, the company may have tried to cover up their actions after these stories first broke in March, sending company executives to shred documents pertaining to the alleged deals.